Recently, there's been a lot of advertisements for Titan on YouTube. They've quite clearly been spending a lot on their marketing budget. Titan is an app where they take your money and invest it in their actively managed fund. Their marketing material will claim to earn a high return annually. They also tend to market towards younger, inexperienced investors (perhaps aged 20-35). Disclaimer, I am a huge critic of public actively managed funds and I hate them with a passion. I believe that they are one of the largest financial scam inventions of the past century.
The track record of this “fund” only goes back to 2018, a year in the middle of one of the longest bull runs in history. A blindfolded monkey had a 50/50 percent chance of beating the S&P 500 over this time period (not a joke, google it).
Let's pretend for a minute that the “advisors” at Titan have a magical ability to pick stocks that will outperform the S&P 500 every year. Even if this is true, the real enemy in the room is the fees. Titan charges 1% per year on the market value of your account (monthly charges). Commissions like this are absolute destroyers of wealth.
Let’s say your portfolio earns 9% per year. 1% goes to the fee. Let’s say 3% to inflation (assuming inflation falls back to normal ranges eventually. Today, it's much higher) and maybe 3% to taxes and…..omg there’s nothing left for you! Investment returns are very fragile and this model only hurts you.
The evidence is clear that when you put your money in the hands of someone else, rather than the market, you will pay the opportunity cost of gains and compounding that the market could have given you. Just look at Cathie Wood's ETF's. Sure, they might recover, but imagine all of the people who trusted her “intelligence” and “magic”. Nothing against her, but she has failed to outperform the market as she claimed she would. In fact, she's not only failed to match the market, but she has lost money for her shareholders.
The hedge funds (btw, Titan is not a real hedge fund even though they use that slang in their marketing) that actually could outperform the market (Buffett's early years, Soros, Medallion Fund, etc) were private. You don't find ads on YouTube for these types of funds.
There's nothing wrong with buying individual stocks if you want to play the game. It's fun, I do it too (I'm a total WSB freak), but when it comes to the bulk of your money and long term wealth, why not just buy the market? Just go SPY or VTI and pay barely any fee and get better performance.
More reading on why investment advisors are toxic:
https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/
P.S. F*** the YouTubers who shill this crap even though they preach index fund investing on their channels.
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